|Source: US Energy Information Administration. Note: Petroleum production includes crude oil, natural gas liquids, condensates, refinery processing gain, and other liquids, including biofuels. Barrels per day oil equivalent were calculated using a conversion factor of 1 barrel oil equivalent = 5.55 million British thermal units (Btu).
The US Energy Information Administration (EIA) estimates that the United States will
be the world's top producer of oil and natural gas hydrocarbons in 2013,
surpassing Russia and Saudi Arabia. For the United States and Russia, total
petroleum and natural gas hydrocarbon production, in energy content terms, is
almost evenly split between petroleum and natural gas. Saudi Arabia's
production, on the other hand, heavily favours petroleum.
Since 2008, US petroleum production has
quadrillion Btu (British thermal unit), with dramatic growth in Texas and North Dakota. Natural gas
production has increased by
3 quadrillion Btu over the same period, with much of this growth coming from the
eastern United States. Russia and Saudi Arabia each increased their combined
hydrocarbon output by about 1 quadrillion Btu over the past five years.
The EIA says comparisons of petroleum and natural gas production across countries are not
always easy. Differences in energy content of crude oil, condensates, and
natural gas produced throughout these countries make accurate conversions
difficult. There are also questions regarding the inclusion of biofuels and
refinery gain in
the calculations. Total petroleum and natural gas hydrocarbon production
estimates for the United States and Russia for 2011 and 2012 were roughly
equivalent - - within 1 quadrillion Btu of one another. In 2013, however, the
production estimates widen out, with the United States expected to outproduce
Russia by 5 quadrillion Btu.
"This is a remarkable turn of events,"
Adam Sieminski, head of the US
Energy Information Administration, a unit of the Department of Energy, told The
Wall Street Journal . "This is a new era of thinking about market conditions,
and opportunities created by these conditions, that you wouldn't in am
years have dreamed about."
The US produced the equivalent of about 22m barrels a day of oil, natural gas
and related fuels in July, according to figures from the EIA and the
International Energy Agency. Neither agency has data for Russia's gas output
this year, but Moscow's forecast for 2013 oil-and-gas production works out to
about 21.8m barrels a day.
The Journal says US imports of natural gas and crude oil have fallen 32% and
15%, respectively, in the past five years, narrowing the US trade deficit. And
since the US is such a big consumer of energy, the shift to producing more of
its own oil and gas has left substantial fuel supplies available for other
buyers. Nations that rely on peddling petroleum for their economic strength and
political clout face dwindling market power as a result.
Oil prices so far remain high, however, closing Friday in the US at $103.10 a
barrel, up about 18% from a year ago.
The Journal says
Russia produced an average of 10.8m barrels of oil and related fuel a day
in the first half of this year. That was about 900,000 barrels a day more than
the US -- but down from a gap of 3m barrels a day (b/d) a few years ago,
according to the IEA.
"Russia looks like the main loser in the
global market," said Tatiana Mitrova, of the Russian Academy of Sciences' Energy
Research Institute. More than 40% of Russia's budget comes from oil-and-gas
related duties and taxes, she said.
The institute has forecast that Russian oil exports
could fall 25% to 30% after 2015, reducing gross domestic product more than
“Tight oil will not affect Opec at all,”
Abdalla Salem el-Badri, the OPEC oil cartel's secretary general, told the
Oil & Money conference, hosted by Energy Intelligence and the International
Herald Tribune, last Tuesday.
The 12-member producer group has consistently
played down the impact of the US unconventional oil revolution, although it has
agreed to study the impact. “We should look at tight oil (from shale rock) as a
new liquid and welcome it,” el-Badri said. He estimates output could increase
from 2.5m b/d now to 5m b/d by the middle of the decade. “I don’t think this
quantity of liquids would cause much trouble for Opec,” he said.
El-Badri added that tight oil suffers from high
decline rates and high production costs, which he estimated at $90 per barrel,
making output dependent on high oil prices. “If prices drop to $60-$70/bbl,
tight oil will be out of the market altogether,” he said. He estimated that by
2018, the decline rate means production could start dropping from its 5m b/d
He said Opec production is expected to remain
around 30m b/d until 2016, although he put the call on Opec in the last quarter
of 2013 at 30.7m b/d.
The Opec chief termed US energy independence a
myth. “There is nothing called independence in the oil industry,” he said. “The
people who call for it in the US do not know the oil industry.”
reports that Peter Voser, Royal Dutch Shell chief executive, said in
his keynote address on Tuesday that global decline rates of 4%-6% a year mean
the industry needs to “build another Saudi Arabia” -- which pumps 10m b/d - -
every 30 months.
The International Energy Agency (IEA) reckons the
world will have to find 40m b/d simply to offset declines between now and 2030,
let alone the volumes required to meet incremental demand.
Check out our
, at a low annual charge of €25